Bungling boss of Burberry to trouser £14m

The boss of Burberry will pocket £14m over the next month as he reaps the benefits of a share deal struck four years ago.

Christopher Bailey, the luxury brand’s chief creative and chief executive officer, will receive £10.5m of shares despite presiding over a 5pc fall in profits and a sales decline.

The 46-year-old’s total pay over the last year also almost doubled to £3.5m, despite the firm cutting jobs and making savings.

Bailey will collect 600,000 of the 1m of shares he was awarded in 2013, before he took on the role as chief executive.

At last night’s closing price of 1743p (down 3.7pc, or 67p), the shares are worth £10.5m, which he will be awarded when former Celine boss Marco Gobbetti succeeds him as chief executive.

In other payments, Bailey received a salary of £1.1m, £469,000 in benefits and allowances, £330,000 in pension contributions, £240,000 in a share plan and £1.6m in long-term incentive payments. he also received £1.4m in an exceptional share award which relates to a performancebased bonus agreed in 2014.

This could have handed him a payout of £8.7m at today’s share price over the next three years if he hit targets, but the disappointing results capped this year’s portion at 61.7pc of the maximum. When the pay deal was announced in 2014 after Bailey took on the top post, 52pc of votes cast in a non-binding ballot of shareholders rejected the policy. however last year Bailey decided not to be considered for an annual bonus, due to the lacklustre financial performance of the business – and perhaps to avoid a repeat of the backlash three years ago. Should he have requested one, he would have received 46pc of the total available.

Burberry’s annual report, published yesterday, revealed plans to cap executive bonuses at twice the base salary, compared to 2.25 under the previous policy. It will also cap its share award plans for exceptional performance from six times to 3.75 times salary.

Shareholders will vote on the pay policy at the AGM on July 2017.

The brand is in the midst of a turnaround which will see Bailey keep his chief creative officer role and take on the post of president.

As part of his golden hello, Gobbetti, 57, was handed £4.3m of share options to secure his appointment, due to awards he forfeited on leaving his previous employer. Gobbetti, who will be paid £1.1m a year, is not the only new executive to have been welcomed into the business with a handsome award.

New chief finance officer Julie Brown was handed £4m of shares when she joined from Smith & Nephew. Brown, 55, also received £550,000 in cash to make up for a bonus she would have received.